More Weakness to Come for Sterling

The US dollar and British Pound have been the two worst performing of the major currencies over the past few months. Since July, the pound has lost 6.4 percent against a basket of the nine other most-traded currencies, including last week’s 1.29 percent drop. However, according to some, the worst is yet to come.

“There’s definitely more weakness to come,” said Hans- Guenter Redeker, global head of currency strategy in London at BNP Paribas SA. “The fiscal consolidation is going to hit the economy at a time when it’s slowing. Under these conditions, you need to have loose monetary conditions and that weakens the exchange rate.”

Source: Bloomberg

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